As a result of the significant changes to consumer law, the Commerce Commission now has a new set of regulatory and prosecutorial powers that can result in significant penalties for those in breach of their obligations.
Employees of the Commission now have powers to enter and inspect premises to ensure compliance and to issue formal notices which include suspension notices and unsafe goods notices, where there has been a breach.
Where the Commission has reasonable belief that a breach is occurring, or a complaint has been made to them, the Commission have the power to conduct compulsory interviews and compel the production of documents. Failure to answer any questions put to you during these interviews or to supply the required documentation can result in criminal prosecution. It is important to note that while information cannot be used against you personally, any information obtained during these interviews can be used in any prosecutions against companies and/or any other person.
If the Commission finds there has been a breach there are a number of options open to the Commission up to and including prosecution. The Commission now has the ability to accept “enforceable undertakings” from a person as a way of resolving issues without the need for prosecution, however any breach of this undertaking will be taken very seriously and will result in the Commission applying to the Court for enforcement action. The Commission can also issue infringement notices where there are reasonable grounds to believe that an offence has been committed.
If you are found guilty of a breach of your consumer law obligations you need to be aware that you can now face significant financial penalties. Fines for misleading and deceptive conduct have increased 300% and now can result in a fine up to $200,000 for individuals and $600,000 for companies. Breaches in relation to consumer transactions and auctions can result in individual fines of up to $10,000. There is also a risk of a Management Ban Order, which prevents individuals from managing companies for a period of up to ten years, this can also arise where your employees have committed breaches rather than you personally and therefore it is crucial your staff are aware of the far reaching implications of their conduct.
We can offer you all the advice you need to ensure that you are aware of your obligations and the potential penalties you or your company could incur.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co who normally advises you, or alternatively contact:
Kirsten Maclean
(03) 477 8870 or (09) 379 0055
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.